Becoming an entrepreneur – not all it’s cracked up to be!

A few weeks ago we questioned the National Youth Agency [NYA] call for young people to become more entrepreneurial. Given the character of youth unemployment we criticised this one-sided, indeed weary emphasis, expressed in the setting up of a NYA commission into enterprise and young people. In this context and given NYA’s avowal of so-called evidence-based practice the latest Office of National Statistics employment/unemployment figures ought to be sobering.

About 15% of the work-force is now self-employed, around 4.5 million people. Since 2010 38% of the growth in employment is down to the rise in the number of self-employed. As Christina Patteson notes, “politicians love to call us entrepreneurs as if we are all about to unveil a blue-print for the next Google.” However reality differs. The average income from self-employment has fallen by 22% since the crash of 2008, dropping from an average of £15,000 to under £10,400 per annum, not to mention the lack of sickness/holiday pay with low prospects for a pension.

Given too that the NYA is fond of telling us that it stands for new ways of thinking, I can but recommend that its ideologues spend some time reading Robert McDonald’s blog, ‘Youth and the Enterprise Culture’, which we produce here, more or less in full. The present Professor of Sociology at Teeside University reflects:

Twenty-five years ago, as part of an ESRC research programme, I interviewed around 100 young women and men – from Teesside, North East England – about their experiences of ‘the enterprise culture’. All were some way along the journey of self-employment: planning to start-up, currently trading or looking back on closed businesses. I wrote the book – Risky Business? Youth and the Enterprise Culture – with Frank Coffield, (published in 1991) and also published further articles based on this project.

One spur to this blog was another by Anita Biressi and Heather Nunn who recently charted the rise of schemes and programmes to inculcate the entrepreneurial ethic in young people. Indeed, the UK government has recently launched its ‘New Enterprise Allowance’; a scheme with almost exactly the same aims and package of support as the original Enterprise Allowance Scheme (EAS) of the 1980s, in which virtually all my interviewees participated. Biressi and Nunn outline how ‘entrepreneurship’ is once again ‘promoted as an economic necessity… [as] part of the wider push to re-boot the nation’s economy in keeping with the usual neoliberal beliefs in competition as the driver of wealth … neo-liberalism is … also a social model which insists that we are the authors of our own lives and the architects of our own destinies’. There are many excellent recent examples that interrogate how young people’s ‘aspirations’ and ‘choices’ are (mis)understood under neoliberalism (see, for instance, Lisa Whittaker’s insight into the classed and gendered nature of unemployed young women’s views of celebrity ‘role models’). It is difficult, however, to think of a purer example of the supposed ‘neoliberal project of the self’ than young people electing to ‘become their own boss’.

Risky Business? was probably the first serious, qualitative interrogation of young people’s encounters with ‘the enterprise culture’. What lessons can we learn from it?

‘Neoliberalism’ was much less used in the late 1980s, as a label for the social, economic and political character and condition of the UK. Nevertheless, this was the high water mark of the Thatcherite ideology that pitted ‘the enterprise culture’ against the social and economic drag of ‘dependency culture’. Welfare entitlements were rolled back (especially for youth), the jobless were cajoled to get on their bikes and, if no jobs were to be had, the young unemployed in particular were told to be enterprising and create their own.

Participants had very limited political interest in any of this. The Thatcherite discourse of ‘enterprise’ barely touched them, beyond their practical encounters with a burgeoning industry of state agencies and charities that had sprung up, attracted by multi-million pound government grants to deliver ‘the enterprise culture’. Entrepreneurial ‘role models’ were rarely cited. If pushed, Richard Branson was sometimes mentioned (who, in 2011 against the backdrop of rising youth unemployment, called again for a ‘nation of young entrepreneurs’).

Motivations were more prosaic: a vague sense that ‘being your own boss’ was attractive and/ or the negative push of high unemployment rates. Typically, interviewees had churned around training schemes, unemployment and crap jobs before ending up on the EAS. One of saddest cases was Malcolm. He had circulated through an alphabet soup of government schemes: YTS, JIG, YWS, CP, ET and others. He had been in ‘business’ for a few weeks when I met him: offering advice and consultancy to unemployed people – about how best to cope with being unemployed. He had not yet had any customers.

Because of how participants were recruited, the research could not measure ‘success rates’ (one recent survey estimated that after three years, two-thirds of businesses run by young people have failed). It did offer a three-fold typology of the experience of the people interviewed: ‘runners, fallers and plodders’.

A handful were ‘runners’. They were, or seemed likely to be, successful. At least one of these – a designer clothes shop – is still going, twenty five years later. Family, social, cultural and financial capital seemed helpful here (e.g. having parents ‘in the business’ or who could provide loans).

Most interviewed were ‘plodders’ at the time: emotionally committed to the businesses that were drastically under-capitalized, unprofitable and precarious. Mostly, interviewees had no business training or experience. They survived by undercutting the prices of other local firms and by extreme self-exploitation: working very long hours for no or very low pay (subsidised, for instance, by free ‘bed and board’ from parents). Lillian (22) captured this reality well: “I’m just keeping my head above water. I mean, I’d love to be Richard Branson and the rest but you have to be realistic… you’re never going to be a millionaire, like a big movie star. It’s easier if you come to terms with that. I just see it [self-employment] as keeping my head above water.”

Most of the ‘plodders’ seemed likely to become ‘fallers’. These were those whose businesses had closed because of mounting debts (sometimes incurring legal bankruptcy), sheer exhaustion and a growing realization that there really was never much chance of success. After all, just how many mobile beauticians or free-lance photographers can a local economy support?

I’ll finish with the words of Lynne, a 28 year-old single mother, whose fruit and vegetable market stall had failed. Hopefully her story provides some balance to the shiny words, fake promises and renewed clamour for a ‘youth enterprise culture’; to claims that ‘entrepreneurial ambitions are unequivocally good’. Lynne reflected on her time self-employed at the end of the 1980s:

“It was something I had to try. I was going nowhere … I wanted to climb. I wanted self-esteem. Looking back, it’s been totally the opposite. I’d had two relationships that’d failed. My life has been a failure since leaving college to now. I needed something to succeed. As it happens, I failed in that too. Perhaps I’m just a born failure! But at least I’ve had the experience. I haven’t just sat back moaning on the dole. I’ve tried to get out of the poverty trap. Fine, it didn’t work but … Now, a year later, I have £10,000 debt, rising with interest … I’ve had the County Sheriff on my doorstep with a Possession Order. Because he was a nice chap and he saw I had a kid, he left the furniture … I’m between the Devil and the Deep Blue Sea … I’m stuck, just waiting for the axe to fall … I’ve went through hell mentally with it. Strait-jacket time. St. Nicks’ here I come…”